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mybet Holding SE: Sports betting provider mybet's Q3 marked by strong growth and weak margins

mybet Holding SE  / Key word(s): Quarter Results

08.11.2012 08:10

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Sports betting provider mybet's Q3 marked by strong growth and weak margins

- Nine-month revenues rise by 14.3 percent to EUR 49.3 million
- Weak bookmaking margins burden Q3 earnings
- Adjustment of EBIT forecast to EUR 8.0 million to EUR 9.0 million
- Strong start to Q4

mybet Holding SE (formerly JAXX SE; Deutsche Börse, Prime Standard, ISIN
DE000A0JRU67) today publishes its report on the first nine months of 2012.
Following the very successful first two quarters, which brought record
revenues and new-customer totals on the back of the UEFA European
Championship, in many respects the third quarter maintained the positive
performance.

Business performance

Betting stakes in September were almost up at the June level, when the
European Championship took place. However the long summer break in European
football leagues after the European Championship and weak margins in
September, which impacted on the entire sports betting industry, meant
revenues were relatively low. Despite this seasonal effect, mybet was able
to compensate for the loss of income from the lottery operations, which
were disposed of in May, and it generated consolidated revenue of EUR 15.0
million. This compares with a revenue figure of EUR 14.7 million for the
third quarter of the previous year, when lottery agency business brought in
around one-third of revenue.

Earnings before interest and taxes (EBIT) for the third quarter came to EUR
-1.0 million, almost entirely due to September's weak margins. EBIT for the
third quarter of the previous year was EUR 1.0 million.

Cumulatively over the first nine months of the year, revenue was up a
healthy 14.3 percent at EUR 49.3 million. Nine-month EBIT was EUR 6.8
million. Taking into account the divestment proceeds of EUR 7.7 million
from the sale of lottery operations, the operating result achieved by the
group was thus EUR -1.0 million. In the previous year the nine-month result
was EUR 0.9 million, with lottery operations contributing EUR 2.3 million.

In terms of customer growth, mybet's platforms have seamlessly maintained
the successful performance of recent quarters. The total number of
registered users crossed the 1 million threshold at the end of the third
quarter. As an average for the third quarter, almost 20,000 customers per
month placed a bet online. This compares with only around 16,000 in the
same period of 2011.

The betting stakes placed on mybet's sports betting products in the third
quarter rose by 20 percent to EUR 38.6 million (previous year EUR 32.3
million). The weaker margins meant the hold increased by only 8 percent to
EUR 5.8 million. A comparison of the nine-month periods revealed a 40
percent rise in betting stakes to EUR 136.3 million, and a 44 percent
increase in the hold to EUR 22.3 million (previous year EUR 15.6 million)
thanks to the still-healthy margins achieved in the first half.

In a turnaround from original plans, mybet succeeded in passing on to the
end customer the entire German gaming tax that has added 5 percent to
betting stakes since July 1, 2012. This has been hugely beneficial to
mybet's financial performance.

Cash and cash equivalents at the balance sheet date of September 30, 2012
came to around EUR 14.0 million (December 31, 2011: EUR 7.2 million). This
figure does not yet include the full final payment from the disposal of
lottery operations, which was earmarked for the end of Q3 but not actually
posted until the start of the fourth quarter.

Outlook

The fourth quarter of 2012 has started very strongly. For just the first
week of October, the hold for mybet products was higher than the figure for
the whole of September. Overall, October brought a record hold, which
should have largely compensated for the September result. With a large
number of football events, spanning the Bundesliga, the Europa and
Champions Leagues and World Cup qualifiers, the fourth quarter holds the
promise of record levels of betting stakes and good margins. The market
launch of the mybet app for smartphones (iPhone, android) that has been
piloted since the start of the Bundesliga season is also scheduled for the
fourth quarter.

The cost basis will be further optimised in the fourth quarter. Growing
efficiency is expected, in particular in connection with the marketing
budget and commissions for venture partners. The costs of the holding
company will be reduced yet again as a result of staffing changes and
rental savings.

In the shop sphere, mybet will continue the course of consolidation of
recent months and place the spotlight on the revenue volume, size and
location of its betting shops. Furthermore, mybet is planning to open its
first own flagship stores in the fourth quarter. mybet aims to be running
between 50 and 60 of its own shops in the next two years.

In Schleswig-Holstein, the granting of the poker and casino licence is
still awaited. Whether and when the Ministry of the Interior will grant
this remains unclear.

On the basis of the nine-month figures and progress to date in the fourth
quarter, the Management Board continues to expect revenue of between EUR 65
and 70 million for 2012 as a whole, along with a positive EBIT. However the
forecast range has been revised downward by EUR 1.0  million to EUR 8.0 to
9.0 million in light of the Q3 result. Of this total, EUR 7.7 million will
come from the divestment of the Lotteries segment.

Key figures for 9 months / 3rd quarter:


                         9M 2012  9M 2011  +/-    Q3 2012  Q3 2011  +/-   
                         EUR '000 EUR '000 %      EUR '000 EUR '000 %     
Gross revenue             176,873  134,930  +31.1   52,362   45,695  +14.6
Revenue                    49,264   43,108  +14.3   14,966   14,686   +1.9
          Sports Betting   23,223   16,521  +40.6    6,101    5,975   +2.1
          Casino & Poker   15,449   12,554  +23.1    5,532    3,489  +58.6
               Lotteries    5,006   10,329  -51.5    1,015    4,007  -74.7
           Horse Betting    4,463    3,002  +48.7    1,534    1,051  +46.0
Net gaming revenue (NGR)   48,567   42,633  +13.9   14,634   14,508   +0.9
Other operating income*     8,772      926 +847.3      276      104 +165.4
EBITDA                      9,695    4,286 +126.2     -300    2,254    n/a
EBIT                        6,766      898 +653.5     -975    1,040    n/a
Consolidated earnings       5,227      512 +920.9   -1,303      683    n/a
Earnings per share (EUR)     0.22     0.01    n/a    -0.06     0.03    n/a
                                                                          
                         30/09/12 31/12/11                                
Cash holdings              14,026    7,187                                
Shareholders' equity       27,614   22,673                                
Equity ratio               64.2 %   60.7 %                                


*The other operating income for 9M 2012 includes the divestment proceeds of EUR 7.7 million from the disposal of German-language lottery operations in the second quarter of 2012 The Nine-month' report will be made available for downloading in the course of today on the websites www.deutsche-boerse.com and www.mybet-se.com. Contact: mybet Holding SE Investor Relations & Corporate Communications Stefan Zenker Tel. +49 (40) 85 37 88 47 Fax +49 (40) 85 37 88 30 Mail stefan.zenker@mybet.com 08.11.2012 DGAP's Distribution Services include Regulatory Announcements, Financial/Corporate News and Press Releases. Media archive at www.dgap-medientreff.de and www.dgap.de --------------------------------------------------------------------------- Language: English Company: mybet Holding SE Jägersberg 23 24103 Kiel Germany Phone: +49 40 85 37 88-0 Fax: +49 40 85 37 88-30 E-mail: ir@mybet.com Internet: www.mybet-se.com ISIN: DE000A0JRU67 WKN: A0JRU6 Listed: Regulierter Markt in Frankfurt (Prime Standard); Freiverkehr in Berlin, Düsseldorf, Hamburg, München, Stuttgart End of Announcement DGAP News-Service ---------------------------------------------------------------------------